If you’ve owned an electric car and never had to think about road tax, that changed this year. From 1 April 2026, several updates to Vehicle Excise Duty (VED) came into force, and they affect nearly every driver, not just EV owners.
The headline change: EVs now pay road tax
Electric vehicles continue to get the lowest first-year VED rate, which remains at £10, but from year two onward, they move to the standard annual rate of £200, the same rate applied to petrol, diesel, and hybrid cars. For anyone who bought an EV specifically because road tax was free, this is a real annual cost that wasn’t there before.
Everyone else pays a bit more too
The standard annual VED rate, which applies from the second year onwards, rose slightly from £195 to £200, and first-year costs also increased depending on a car’s CO² emissions, with the highest-emission band jumping by £200, bringing the top first-year charge to £5,690.
The “expensive car supplement” threshold moved, but only for EVs
The Expensive Car Supplement threshold for petrol, diesel, and hybrid cars stays at £40,000, with the yearly supplement rising to £440, applied for five years from the vehicle’s second tax payment, while the EV threshold rises to £50,000, meaning electric cars priced under that amount no longer pay the additional charge. In practice, that means a mid-range EV under £50k is now cheaper to run than an equivalent petrol car over £40k, even though both are taxed for the first time.
A small change for company car drivers
The company car Benefit-in-Kind (BiK) rate for EVs rises to 4%, up from 3% in 2025/26, modest, but worth knowing if you run an EV as a company car.
What to actually do about it
- Check your car’s current VED status and renewal date, don’t assume it’s still exempt if you drive an EV
- If you’re budgeting for a new EV, factor in the £200/year from year two, not £0
- If your EV is priced near £40–50k, the supplement threshold could be the difference between paying an extra £440/year or not